Krebs Daily Briefing 18 March 2016

Thomas L. Krebs, Securities Litigation, Regulation and Compliance Attorney Lawyer (c)2014 Brandon L. Blankenship
Thomas L. Krebs


Russia can make powerful Syria comeback within hours: Putin

Vladimir Putin said Russia’s military success in Syria had allowed him to order a partial draw down of forces, but stressed the Kremlin could scale up its presence again within hours and would continue to carry out air strikes there. Speaking in the Kremlin three days after he ordered Russian forces to partially withdraw from Syria, the Russian president said the smaller strike force he had left behind in his closest Middle East ally was big enough to help forces loyal to President Bashar al-Assad keep advancing. “I’m sure that we will see new and serious successes in the near future,” Putin told an audience of over 700 servicemen and military officers at the Kremlin ceremony. In particular, he said he hoped that Palmyra would soon fall to Assad. Russian forces would continue to carry out air strikes against Islamic State, Al Nusra and other terrorist groups, he added, and would keep providing a wide range of aid to Syrian government forces. Although he said his preference was for a negotiated diplomatic solution to the conflict with those opposition groups who had signed up to a ceasefire, he made clear Russia could easily scale up its forces again. “If necessary, literally within a few hours, Russia can build up its contingent in the region to a size proportionate to the situation developing there and use the entire arsenal of capabilities at our disposal,” said Putin. He sought to dampen any speculation of a rift with Damascus, saying Moscow’s partial withdrawal from Syria had been agreed with Assad. Putin on Monday ordered the bulk of the Russian military contingent in Syria to be pulled out after five months of air strikes, saying the Kremlin had achieved most of its objectives. Russia would finish withdrawing most of its Syria aviation strike force “any day now” and no later than by the end of this week, Viktor Bondarev, the head of the Russian air force, told the Komsomolskaya Pravda newspaper in an interview published on Thursday. That tallies with an updated Reuters calculation based on state TV and other footage, which shows that as of Thursday morning 18 or half of Russia’s estimated 36 fixed-wing military jets had flown out of Syria in the past three days. On Thursday, the Rossiya 24 channel showed three Su-24 bombers landing at their home bases in the Urals.

Was a Fake War in the Saudi Desert a Dress Rehearsal for a Syrian Invasion?

In yet another surprising tactical maneuver, Russian President Vladimir Putin announced on Monday, March 14, that he is withdrawing the main part of his forces from Syria. While it may be premature to assess both the motive and final level of the drawdown, this could be a potential pivot in this seemingly endless crisis. Moscow is probably feeling relatively confident in Syrian President Bashar al-Assad’s position and the overall direction of the peace talks and is also increasingly concerned about the high cost of the operation — during a period of a weak ruble and very low oil prices, upon which the Russian economy is dependent. The interesting question is whether this retreat provides an opening for a significant Arab ground force to be inserted into the conflict. Coincidentally, just as Russia is pulling forces out of Syria, Saudi Arabia is completing a significant military exercise that may prove to have been a dress rehearsal for Sunni Arab engagement on the ground in that conflict. Indeed, just last week in the deserts of Saudi Arabia, some 350,000 troops, 20,000 tanks, dozens of ships, and 2,500 warplanes from 20 countries concluded the largest military exercises ever held in the Middle East. Dubbed “North Thunder” (Raad al-Shamal in Arabic), these huge, historic ground, air, and naval exercises have been called war games. But make no mistake: They are anything but games. This is an effort described by Saudi Arabia and its allies to create a cohesive force to combat terrorist organizations such as the Islamic State, al Qaeda, al-Shabab, and perhaps even Boko Haram — as well as to send a strong signal to Iran, a country exhibiting expansionist ambitions to say the least. The exercises emphasized training conventional forces to conduct low-intensity combat operations against nonstate armed groups. Another stated goal is improving the inter-operability of the armed forces of Saudi Arabia and its allies so that they can coordinate their maneuvers in spite of differing languages, military equipment, and operating systems. It also included maritime and bombing exercises designed to project power over distance. While the three weeks of war games concluded on March 10, the hope is that their impact will be long-lasting and far-reaching. The real question, of course, is whether this massive exercise is only a show of force or whether it portends the actual deployment of combat power to troubled spots in the region.

The Irrelevant Diplomat

The embassy, at least in its traditional form, is facing an existential crisis. The global transformations of the twenty-first century have dramatically changed the way nations practice diplomacy. The rise of digital communications, diminishing resources, and growing security threats all raise the question of whether the traditional embassy is still relevant. More than half of the developed nations in the Organization for Economic Cooperation and Development (OECD) have reduced their diplomatic footprint over the last decade, according to our research at the Lowy Institute, where we have constructed the Global Diplomacy Index, which charts almost 6,000 diplomatic posts across nearly 660 cities around the world. As government budgets shrink, embassies and diplomats seem more like expensive luxuries than political assets. It doesn’t help, of course, that diplomats are stereotyped as overpaid and ineffectual cocktail-circuit regulars and that foreign ministries frequently fail to reflect the times. They generally lack diversity and are slow to embrace innovation, even social media. Australia’s diplomats in Indonesia, for example, were still not using social media in 2010, even though Indonesia is the site of one of its most significant embassies, the largest recipient of Australian aid, and one of its most important neighbors in Asia. Despite being described as a “digital dinosaur” in 2010, the secretary of Australia’s Department of Foreign Affairs admitted in 2012 that he still did not consider digital diplomacy a high priority. And with the rising importance of economic diplomacy, governments are more inclined to open trade offices and innovation hubs than embassies. For example, our research indicates that between 2009 and 2015 the United Kingdom’s Foreign & Commonwealth Office shed almost 30 diplomatic missions, while its science and innovation network expanded its coverage from 24 to 28 countries. Once the government’s eyes and ears abroad, embassies are now usually the slowest way to get information, unable to compete with lightning-fast media reporting and exhaustive country analyses prepared by NGOs and risk consultancies. The digitally connected world allows governments to communicate directly with their counterparts, and some world leaders, including Indian Prime Minister Narendra Modi, have become prodigious users of Twitter, Facebook, and Instagram, speaking to huge domestic and foreign audiences without even telling their embassies. More:

The appearance of disappearance: the CIA’s secret black sites

Twelve years ago, in a village on the edge of a pine forest not far from Lithuania’s elegant capital Vilnius, workmen constructed an unusual warehouse. It was the size of an Olympic swimming pool with no windows, many air vents and no stated purpose. The site had formerly been a riding stables and a paddock. It had also served as a local watering hole — a welcome one since the village lacked a bar or restaurant. The new building was shiny and modern, incongruous amid the tumbledown farm buildings and Soviet-era housing blocks. The convivial atmosphere of the riding club was replaced, in the words of one local inhabitant, by “this certain emptiness”. Naturally, the neighbours were curious. They speculated about the new building’s function. Was it a military listening post? A drug factory? A ­clandestine organ transplant lab? None of them guessed that it might be a key facility in the US Central Intelligence Agency’s Rendition, Detention and Interrogation programme, one of a secret network of “black sites”, set up in half a dozen countries to house undisclosed prisoners out of reach of lawyers, the Red Cross or other branches of the US government. Why should they? Lithuania was a long way from the front lines of the war on terror, and the village of Antaviliai, although only 20 minutes by car from the capital, was known for summer lake swims rather than for covert operations. The secret detention programme, as it was grad­ually uncovered, stretched across the globe. The network of sites we have documented encompasses Antaviliai and Kabul, North Carolina and Skopje, Columbia County, Milan, Tripoli and Bucharest. In our journeys through this material, we have sought to portray the appearance of disappearance. More:



Can Bill Ackman’s Reputation Recover from the Valeant Mess?

Activist investor Bill Ackman has made a career of making big bets with high stakes that, many times, have come out in his favor. But the tide has turned of late, and Ackman’s reputation as a bigwig billionaire now hangs in the balance as his firm struggles through a sideways market made worse by a series of money-losing positions. The biggest thorn in the side of Ackman’s $12 billion Pershing Square Capital is Valeant, a multinational drug company now facing a shareholder lawsuit and a federal investigation in both the U.S. and Canada for its aggressive pricing strategies. Shares of the company have tumbled more than 85 percent since August, and nearly 70 percent so far this year. Tuesday in particular was a bloodbath for Valeant, when it announced it was cutting its profit forecast for the year and said it would not be able to file its annual financial statements in time, cautioning that it could breach some of its debt agreements. Shares sunk 51 percent in that one day alone. Valeant’s dismal news represents a massive loss for Ackman, whose Pershing Square has a 9 percent stake in the company. The firm shed nearly $770 million on the bet when Valeant’s stock tanked. Ackman tried to stanch the bleeding with a letter to investors on Tuesday, saying that Pershing Square’s vice chairman joined Valeant’s board last week, which will give the fund a “much more proactive role at the company to protect and maximize the value of our investment.” “We continue to believe that the value of the underlying business franchises that comprise Valeant are worth multiples of the current market price.,” he wrote. But Valeant is hardly Ackman’s only headache. On Wednesday, Pershing Square said it sold 20 million shares of another one of its big bets gone bad—the food and beverage company Mondelez International. Shares of the company are down nearly 9 percent this year, which pales in comparison to Valeant’s steep drop, but is a heavy burden on top of Ackman’s other losses. The optics of the one-two punch of Valeant and Mondelez are not great for Ackman, particularly coming off the losses he saw in 2015. Pershing Square’s investors lost 20.5 percent last year in a relatively flat market, as the firm suffered its worst performance in its history. Ackman put his tail between his legs in his year-end letter to investors in a section labeled “humility.” In the short term, his reflections seemed to have done little to help him regain any lost ground so far this year. Pershing Square Holdings, Ackman’s publicly traded vehicle, said Wednesday that it was down 26.4 percent so far in 2016. More:


Study Finds Public Pension Promises Exceed Ability to Pay


When Detroit went bankrupt in 2013, investors were shocked to learn that the city had promised pensions worth billions more than anyone knew — creating a financial pileup that ultimately meant big, unexpected losses for Detroit’s bondholders. Now, researchers at Citigroup say the groundwork has been laid for similar conflicts across the developed world: Governments have promised much more than they can most likely pay to current and future retirees, without revealing the disparity to investors who bought government bonds and whose investments could be at risk. Twenty countries of the Organization for Economic Cooperation and Development have promised their retirees a total $78 trillion, much of it unfunded, according to the Citigroup report. That is close to twice the $44 trillion total national debt of those 20 countries, and the pension obligations are “not on government balance sheets,” Citigroup said. “Total global government debt may be three times as large as people currently think it is,” the researchers warned, after gathering as much information as they could about various government pension plans and adjusting the amounts where necessary, to permit fair comparisons with bond debt. Getting each country’s unstated pension obligations down on paper, along with the sovereign debt, showed that some countries have almost certainly promised more than they can deliver. “If you owed student loans of $44,000, and the bank called you up and said, ‘actually you owe $134,000,’ you’d fall off your chair,” said Charles E. F. Millard, head of pension relations at Citigroup. “That’s what this is.” He said he did not expect all the overextended governments to experience sudden head-on collisions between bondholders and pensioners the way Detroit did. Instead, he said many of those countries — as well as many American states, cities, school districts and other jurisdictions — would keep struggling along, cutting more and more services, raising taxes and wondering where all the money was going. More:


Our Founding Fathers included Islam


Excerpted from “Thomas Jefferson’s Qur’an” [He] sais “neither Pagan nor Mahamedan [Muslim] nor Jew ought to be excluded from the civil rights of the Commonwealth because of his religion.” — Thomas Jefferson, quoting John Locke, 1776 At a time when most Americans were uninformed, misinformed, or simply afraid of Islam, Thomas Jefferson imagined Muslims as future citizens of his new nation. His engagement with the faith began with the purchase of a Qur’an eleven years before he wrote the Declaration of Independence. Jefferson’s Qur’an survives still in the Library of Congress, serving as a symbol of his and early America’s complex relationship with Islam and its adherents. That relationship remains of signal importance to this day. That he owned a Qur’an reveals Jefferson’s interest in the Islamic religion, but it does not explain his support for the rights of Muslims. Jefferson first read about Muslim “civil rights” in the work of one of his intellectual heroes: the seventeenth-century English philosopher John Locke. Locke had advocated the toleration of Muslims—and Jews—following in the footsteps of a few others in Europe who had considered the matter for more than a century before him. Jefferson’s ideas about Muslim rights must be understood within this older context, a complex set of transatlantic ideas that would continue to evolve most markedly from the sixteenth through the nineteenth centuries. Amid the interdenominational Christian violence in Europe, some Christians, beginning in the sixteenth century, chose Muslims as the test case for the demarcation of the theoretical boundaries of their toleration for all believers. More:

House passes resolution condemning IS atrocities as genocide

WASHINGTON (AP) — Ratcheting up the pressure on the Obama administration, the House has overwhelmingly approved a resolution that condemns as genocide the atrocities committed by the Islamic State group against Christians and other religious and ethnic minorities in Iraq and Syria. The non-binding measure, passed Monday by a vote of 393-0, illustrated the heavy bipartisan support for action on Capitol Hill. Secretary of State John Kerry is leaning toward making a genocide determination against the Islamic State and could do so as early as this week, when a congressional deadline for a decision has been set.

But the Obama administration officials have cautioned that a legal review is still under way and said it is likely Kerry will not meet Thursday’s deadline. House Speaker Paul Ryan chided the White House for the anticipated delay. “As the administration waffles on this issue and doubles-down on its failed strategy to defeat (the Islamic State), the American people are speaking loudly and clearly on this issue,” the Wisconsin Republican said. The House resolution identifies the Islamic State’s actions against Christians, Yazidis and other groups, including the Kurds, as “genocide, war crimes and crimes against humanity.”

The resolution was sponsored by Rep. Jeff Fortenberry, R-Neb., who said his congressional district includes the highest concentration of Yazidis in the U.S. Many of them received visas in return for working as translators for American military forces and brought their families with them. An executive branch determination of genocide, however, would be different from the House measure and fraught with moral and potential legal consequences. It would also mark only the second time a U.S. administration has reached that conclusion while a conflict is ongoing. The first was in 2004 when Secretary of State Colin Powell determined that atrocities being committed in Sudan’s Darfur region constituted genocide. More:–politics.html;_ylt=A0LEVvzBB.tWkFgAAGQnnIlQ;_ylu=X3oDMTEycXV2ZGhiBGNvbG8DYmYxBHBvcwM3BHZ0aWQDQjE3MjBfMQRzZWMDc3I-


The 9 most heated moments from Rick Snyder’s congressional hearing on the Flint water crisis


Who’s to blame for the Flint water crisis? If Thursday’s heated congressional hearing with Michigan Gov. Rick Snyder (R) and Environmental Protection Agency Administrator Gina McCarthy is any indication, the answer to that probably depends on your politics. Republicans made clear they think McCarthy and the EPA are the reason many Flint residents still don’t have clean drinking water a year and a half after the city switched its water supply from Detroit to the Flint River and started pumping lead-tainted water into residents’ homes and businesses. The EPA was too slow — possibly even negligent — to respond to concerns, they say. Democrats pointed the finger squarely at Snyder, who came into office in 2011 promising to run government like a business. They say his decision to skip over the democratic process and appoint emergency managers for struggling cities like Flint led to the crisis. Both of those theories were played out several times over as Snyder and McCarthy spent five-plus hours fielding lawmakers’ accusations about what went so terribly wrong in Flint. Here are the nine most contentious moments from the hearing:


‘Sexually suggestive’ relationship ends career of Air Force general who ran air war


The Air Force has fired one of its most senior officers after an investigation into whether he had an affair with a married female officer found that they had exchanged emails that were “sexually suggestive.”

Lt. Gen. John Hesterman was removed from his position as Air Force assistant vice chief of staff, service spokeswoman Anne Stefenek said Thursday. Hesterman previously served as the commander of Air Forces Central Command (AFCENT), leading the early days of the U.S. air war against the Islamic State militant group while deployed at Al Udeid Air Base in Qatar from July 2013 to last June. The investigation was launched after a complaint was lodged with the Air Force inspector general last August that Hesterman had carried on an unprofessional relationship and meddled inappropriately in the assignments of the woman’s husband, who himself also was an Air Force colonel. The husband alleged to the Air Force that a relationship dated back to at least 2007, when Hesterman was a married one-star general and commander of the 48th Fighter Wing, which flies F-15 jets out of England. More:


Ryan: Contested convention looking more likely


Speaker Paul Ryan (R-Wis.) said Thursday there’s no chance he’ll emerge as the GOP presidential nominee if no candidate captures enough delegates before this summer’s convention. For the first time, however, Ryan acknowledged the increasing likelihood that the GOP nominee will be decided in Cleveland at what’s known as a contested or open convention. Donald Trump is the clear front-runner, but whether he can clinch the nomination by winning 1,237 delegates before the party’s July convention remains. unclear. “Nothing has changed other than the perception that this is more likely to be an open convention than we thought before,” Ryan, the ceremonial chairman of the convention, told reporters. “We’re getting our minds around the idea that this could very well become a reality and that those of us who are involved in the convention need to respect that.” The Speaker’s comments Thursday suggest party leaders are beginning to prepare for a floor fight at the convention at Quicken Loans Arena in downtown Cleveland. When The Hill asked him in January about a possible contested convention, Ryan dismissed the idea. “I think it’s ridiculous to talk about it,” he said at the GOP retreat in Baltimore.  But now, as convention chairman, Ryan said he’ll need to “bone up” on not only his ceremonial duties but also on the party rules governing what’s expected to be a raucous, unpredictable convention.  Ryan, Mitt Romney’s 2012 vice presidential running mate, also attempted to end the rampant speculation that he might be nominated if voting in Cleveland goes to multiple ballots. His predecessor, former Speaker John Boehner (R-Ohio), suggested he’d back Ryan if no one has enough votes on the first ballot. “It is not me. … I saw Boehner last night and I told him to knock it off,” Ryan said. “I used slightly different words. I used his own words that he used against us when he told us to knock things off. “It’s not going to be me. It should be someone running for president. … Let’s just put this thing to rest and move on.”


Court skeptical of releasing secret ‘torture’ report

Two federal judges appeared unwilling Thursday to force the release of a 6,900-page Senate study about the CIA’s harsh interrogation and rendition practices under President George W. Bush. Judges on the U.S. Court of Appeals for the D.C. Circuit indicated on Thursday they are reluctant to agree with the American Civil Liberties Union’s (ACLU) argument that the report should be subject to the Freedom of Information Act (FOIA). The government has claimed that the report was a product of Congress, which is exempt from FOIA. “The question is whether Congress gave up, absolutely, the authority that they had” over the report, Judge Harry Edwards said during Thursday’s oral arguments.  It “doesn’t look like” they did, Edwards said. “If Congress has retained control, it retains control,” he added. Democrats on the Senate Intelligence Committee released a 500-page executive summary of the explosive report in late 2014, claiming that their work showed the CIA engaged in barbaric and ineffective practices of torture while misleading its overseers during the Bush administration. The analysis has been dubbed by some as the “torture report” because of its detailed claims about waterboarding, “rectal rehydration” and other brutal practices of detention and interrogation. But the full report has never been released — and never will be, if the government has its way. The 2014 report was the product of years of research and analysis by Senate staffers. The process of compiling the report led to charges that the CIA had violated constitutional protections in the separation of powers by searching the Senate’s side of a walled-off computer network after committee staffers got a hold of a set of secret internal documents. The report’s conclusions prompted government officials to grapple with the legacy of Bush’s aggressive war on terror. “We tortured some folks,” President Obama said in an appearance at the White House after the public summary was released. After Republicans took control of the Senate in 2015, new Intelligence Committee Chairman Richard Burr (R-N.C.) tried to bring all copies of the final report back to Congress, apparently to prevent it from being subject to FOIA. The ACLU has sued to bring the document to light, claiming that the government has an obligation to hand it over under FOIA. But because FOIA does not apply to Congress, the advocacy group first has to prove that the report became a document of the CIA when lawmakers sent it over in 2014. Hina Shamsi, the ACLU’s national security project director, pointed to previous court decisions putting the onus on Capitol Hill to reassert that documents belong to it and not outside agencies. “Congress actually has to clearly assert control,” she told judges. “Right now the record is silent in respect to the assertion of control.”  More:


Wall Street Journal to Trump: ‘Better be careful!’


The Wall Street Journal fired back at Donald Trump on Thursday evening, hours after the Republican candidate demanded the newspaper’s editorial board apologize for pointing out that he has thus far received fewer votes compared to Hillary Clinton in the primaries. “On Thursday the businessman demanded an apology after we—’the dummies at the @WSJ Editorial Board’—accurately noted that Hillary Clinton has received about a million more votes than he has,” the board wrote in a piece headlined “A Trump Reality Check.” “The truth hurts, though Mr. Trump would rather walk down Fifth Avenue shooting the messenger,” the piece continued, alluding to Trump’s joke in January that he could “stand in the middle of Fifth Avenue and shoot somebody” and not lose any voters. In a series of tweets Thursday morning, the Republican front-runner complained about the editorial board’s coverage — for not the first and likely not the last time in the 2016 election cycle. “@WSJ is bad at math. The good news is, nobody cares what they say in their editorials anymore, especially me!” Trump boasted in one, before tweeting another condemnation of the “dummies” at publication owned by Rupert Murdoch, with whom Trump has quarreled over coverage in his media properties, including the Journal (which expressed appreciation that the Manhattan real-estate magnate is “such a loyal reader”). “.@WSJ Editorial says “Clinton primary vote total is 8,646,551.Trump’s is 7,533,692″-a knock. But she had only 3 opponents-I had 16.Apologize,” Trump tweeted Thursday morning. Later in the evening, the paper responded, “Actually his rise has been cleared by the large and fractured GOP field. Of the 20.35 million GOP primary votes cast so far, he has received 7.54 million, or a mere 37%. Despite the media desire to call him unstoppable, Mr. Trump is the weakest Republican front-runner since Gerald Ford in 1976.” “The opinions he should care about are the 39% of GOP voters who said in Tuesday’s exit polls that they would consider supporting a third-party candidate if Mr. Trump and Mrs. Clinton are the nominees, or the 44% of non-Trump GOP voters who said they won’t cast a ballot for him in November,” the editorial board concluded. “As Mr. Trump likes to tweet, better be careful!”


The night the Rolling Stones fired Donald Trump: Keith Richards once pulled a knife to get the GOP-frontrunner out of Atlantic City venue

In 1989, The Rolling Stones’ original members ended their seven-year hiatus and embarked on an ambitious and profitable 115-show tour of Europe and North America. The American leg, named after their comeback album “Steel Wheels,” began in August in Philadelphia and ended in December in Atlantic City. The final show, at the Boardwalk Hall (f.k.a Convention Center), aired on pay-per-view and — like the Miss America Pageant, also held at the Hall — was to be sponsored by the adjacent Trump Plaza Hotel and Casino. Even in the late-‘80s, however, The Stones didn’t want to be associated with Trump. So they cut a deal with him, stipulating he wouldn’t be involved in any promotional capacity outside of Atlantic City and, amazingly, wouldn’t be allowed at the show itself. This story, told last summer and resurfaced on social media this week, illustrates just how deep the animosity went. On the night of the event, “I get word that I have to come to the press room in the next building,” Michael Cohl, the tour’s promoter, told Pollstar last August. “I run to the press room in the next building and what do you think is happening? There’s Donald Trump giving a press conference, in our room!” According to Cohl, Trump then tried to convince him that “they begged me to go up, Michael.” “Stop it,” Cohl replied. “Don’t make a liar of yourself.” Thinking he’d extinguished the fire, Cohl returned to the dressing room only to get word five minutes later that Trump (being Trump) had found his way back to the mic.  “Donald,” Cohl pleaded. “I don’t know if I can control this. Stop it.” Again to the dressing room. Again word that Trump is promoting. This time guitarist Keith Richards offered his help:  “Keith pulls out his knife and slams it on the table and says, ‘What the hell do I have you for? Do I have to go over there and fire him myself? One of us is leaving the building – either him, or us.’” “One of two things is going to happen,” Cohl told Trump. “You’re going to leave the building and, at 6:40, The Rolling Stones are going to speak on CBS News, or you’re not going to leave the building and I’m going to go on and do an interview to explain to the world why the pay-per-view was canceled” Then, while literally telling Donald Trump “You’re fired,” Cohl noticed Trump’s “three shtarkers he’s with, in trench coats, two of them are putting on gloves and the other one is putting on brass knuckles.” Cohl signaled his head of security, who “got 40 of the crew with tire irons and hockey sticks and screwdrivers,” effectively sending off Trump and his goons. “And that was the night I fired Donald Trump,” Cohl concluded.

Rabbis organize boycott of Trump’s speech to pro-Israel group


A group of rabbis is planning to boycott Donald Trump’s speech next week before a leading pro-Israel advocacy group, a sign of growing unease among many Jewish leaders about the populist campaign being waged by the Republican presidential front-runner. About 40 rabbis have said that they plan to participate in the protest of Trump’s appearance Monday at the annual conference of the American Israel Public Affairs Committee, according to an organizer. The planned demonstration comes as members of the Republican Jewish Coalition, a group of major GOP donors, is expected to debate how to deal with Trump during its annual meeting next month in Las Vegas. The concerns being expressed by many Jewish leaders go beyond Trump’s controversial pledge to be “neutral” during peace talks between Israel and the Palestinians — and extend to fears of Trump’s style and approach to power. Some say they hear echoes of a painful past under fascism in Trump’s recent comments appearing to praise authoritarian figures such as Russian President Vladi­mir Putin and in the way that Trump stokes economic anger among his supporters. And they point to Trump’s call for a ban on Muslims entering the United States and his harsh rhetoric on illegal Mexican migrants as reminiscent of the anti-immigrant sentiment that greeted European Jews in generations past. More:

I went from Wall Street…to working at Waffle House

When James Adams walked into Waffle House in 2009 and requested a job application, the manager asked if he’d been sacked because of the meltdown. “Yeah,” Adams said. “Firms like mine caused it.”  The manager gave him a sympathetic look. She said he could start Monday as long as he had a pair of black pants and vowed not to steal anything. He took the job. Adams went from pulling in six figures a year as a hedge fund vice president to serving bacon and grits for $2.13 an hour (plus tips). The job came with a side of “humble pie,” especially when he was put on the graveyard shift with mostly ex-cons as coworkers. His wife thought he was nuts. But he felt he needed to do “deep soul searching.” “I’m willing to admit I played a role in the most horrific financial drama in the last 70 years,” says Adams. On his first day, he couldn’t even find the cheese in the Waffle House refrigerator. Head cook Edward wasn’t amused and wanted him gone. A few days later, Edward walked Adams over to a dirty table. He pointed to a yucky spot and asked Adams to wipe it off. “If you can clean off this spot, you’ll be of more value in this job than you were in your last one,” Edward said. Adams had to prove himself, one table wipe at a time. In his six months waiting tables in Durham, N.C., he and Edward eventually became friends. Other co-workers also came around. A fellow waiter jumped in front of a drunk customer who was about to hurl her grits at Adams. The waiter, who had been in jail twice, gave Adams tips on how to keep customers from getting to you. “I learned a lot from people that weren’t bad guys. They had just done dumb things when they were young,” Adams told CNNMoney. His coworkers had gone to jail for their mistakes, often involving drugs and he felt like many of them rarely got a second chance. Meanwhile, Adams — and pretty much everyone from the Wall Street crowd — got another chance. Adams worked for a firm that traded bonds — including the toxic stuff. It had over $30 billion in assets before the crisis. His job title was “product manager.” That means he hustled clients to invest their money with the firm and then nurtured the relationship. For much of 2007 and 2008, he spent his days telling investors that everything was just fine. In reality, they were invested in junk. The pink slip for Adams arrived in 2009, the year when U.S. unemployment skyrocketed to 10% — one in 10 people were out of work. He applied everywhere and was even rejected from McDonald’s. That’s how Adams, with a college degree from Wake Forest University and an MBA, ended up at Waffle House, one of America’s employers of last resort. It’s one of the few places that hire people who come out of jail. Adams chronicled his shocking tale of going from Wall Street to “Waffle Street” in a book with the tagline “The confession and rehabilitation of a financier.” His life story was made into a film starring James Lafferty from “One Tree Hill” as “Jimmy Adams” and Danny Glover as the cook. It’s now available on Amazon, iTunes, Hulu and other sites and has a 7.3 (out of 10) rating on He says the backlash against Wall Street –in the Occupy Wall Street movement, the Tea Party and now the 2016 election — is “justifiable” “We were living pretty high off the hog,” he admits. But a lot has changed after the 2008 crisis, he says. The party is definitely over, even at the big banks. Today Adams’ life is a lot tamer than his hedge fund or Waffle House days. He works at a financial trust company, where he helps people save and invest for retirement. “A bit” over 35, Adams now gives financial tips to his former Waffle House colleagues. “Here is at least one person who is fessing up,” Adams says of his decision to share his story. He wishes more Wall Street types had joined him.



Bronner Offers Ideas on How to Move Alabama Forward

MONTGOMERY—Recently, the Alabama Political Reporter sat down with Dr. David Bronner, the long-serving head of RSA. “One of the stories I like to tell was an old Birmingham News story that asked, ‘What if we treated Alabama’s football team like we do everything else,’” recalled Bronner. “First of all, Coach Saban wouldn’t be there. Second of all, you would have no practice facility. Third of all, you’d have old equipment. Fourth of all, there’s no way with all that we’d be number one.” Bronner says if you can’t run championship football without proper funding, how can a State operate properly when underfunded. “Okay, so I’m going to give you the least amount of money to run a mental health program, the least amount of money per head in the country to run a prison system, what do you expect?” said Bronner. Under funded prisons and mental health programs have been a systemic problem facing the State for decades. These are the same issues confronting the State when Bronner first arrived at the RSA over 40 years ago. “If you think about the irony of it, it’s incredible, because in the late sixties and ’71, maybe ’72, George Wallace needed money because the prison system was falling apart, and the mental health system was falling apart. And here we are a mere forty-five years later, and what are we talking about?” Bronner said. This has been a solution Bronner has offered for decades, that has mostly fallen on deaf ears. “What are the two things that should be done to improve Alabama right now? One: have a reasonable property tax for education. The second thing is to have a lottery, said Bronner. He says the bill as currently proposed by Sen. Jim McClendon, (R-Springville) is the right way to pass a lottery. “The way it was passed in other states was to offer a blank sheet, and that is, either you want it or you don’t want it, and fight about the details later,” Bronner said. “The only place that ever put the details out was Alabama. And it was the only place it was turned down.” Bronner said he didn’t review Sen. Del Marsh’s omnibus gaming bill, but he has seen similar proposals. “I always thought you should do something [with gaming] that made sense so you could get the revenue off it,” he said. He also added he felt strongly that one person or gaming business shouldn’t be singled out while others are allowed to operate. “I’ve always thought it was absurd that you’d treat one group different from the other in the state. It’s absurd that you’d close down [Milton] McGregor. I mean, if you get him on something, wrong have at it. But you shouldn’t close down a business over here and let another one five miles away do the same thing. I mean, that makes no sense to me at all.” He also feels the same about the casinos operated by the Poarch Band of Creek Indians (PCI) who operate under federal statue. “They put in a lot of money and employ a lot of people. But, on the other hand, you really shouldn’t allow them to do something somebody else can’t do,” said Bronner. “Doesn’t make any sense to me.” According to the Indian Gaming Regulatory Act,  PCI cannot offer any games of chance that are not legal in the State. These ideas on how to move Alabama forward are not new suggestions by Bronner,  but it seems, the rest of the State may finally be catching up with him.

Senator says he won’t be ‘intimidated’ after Rules ouster

A senator removed from the chamber’s Rules Committee said Thursday that no senator “should be required to call anyone before speaking or casting a vote.” Sen. Paul Bussman, R-Cullman, lost his position as vice-chairman of the committee last week. Senate President Pro Tem Del Marsh, R-Anniston, said Tuesday Bussman failed to return his calls about the PREP Act, a teacher tenure and evaluation bill sponsored by Marsh, prior to a vote on the legislation in the Senate Education Policy committee last week.  Bussman voted against it. Marsh also said Bussman offered an alternate calendar without consulting with Rules Chairman Jabo Waggoner, R-Vestavia Hills. Bussman, speaking to the Senate Thursday morning, said he believed the issue was an “internal matter” and that he was trying to prevent the matter from escalating. But the senator defended his actions. “No senator should feel intimidated or threatened,” he said. “I will not be intimidated and if threatened, I will respond.” Bussman also contrasted his removal to that of former Sen. Scott Beason, R-Gardendale, who lost his position as Rules Chairman in 2011 after a trial revealed Beason had secretly taped colleagues as part of an FBI sting and called black voters “aborigines.” Beason later apologized for his comments. Bussman said Beason was not removed until complaints from Senate Democrats, and that he was given a chance to apologize to colleagues. The senator said he would have no further comment. Marsh and Bussman have clashed over education bills in the past. Marsh said earlier this week Bussman’s vote on the PREP Act was not the reason for his removal.

Alabama Republican wants to stop people on food stamps from owning cars — but expects them to get jobs

Alabama Republicans say they want a new bill to drastically limit state welfare programs so that recipients will get jobs — but the bill eliminates the most common means of transportation to and from work. The bill, created by Republican Sen. Arthur Orr, cuts the time frame for assistance from five years to three. It also creates a new layer of bureaucracy for poor people seeking help, including the requirement that they sign a contract vowing to adhere to the program’s rules. It also disqualifies people from getting food stamps or financial assistance for families with children if the recipients own cars, according to the Montgomery Advertiser. “We want to get people working back in the workforce and not hanging out for public benefits because they can,” Orr told the paper. The bill will go to the state Senate after clearing committee 10-3, according to the Advertiser. It limits the programs SNAP, or food stamps, and TANF, or Temporary Aid for Needy Families. The vast majority of TANF recipients — 77 percent — are children, the Andalusia Star News reports. It drew sharp criticism from Democratic Sen. Rodger Smitherman. “I’m going to do whatever I can to stop this,” Smitherman told members of the Senate’s Fiscal Responsibility and Economic Development Committee, while pounding his fist into a table. “I am not going to let you do this to these people. I am not going to let people starve.” Smitherman further criticized fellow lawmakers, pointing out some parts of the state had unemployment rates topping 15 percent. “There’s no provisions in there that guarantee employment if you go through those steps,” he said. In some areas the number of aid recipients is high — 20 percent of the Covington County population, for example, according to the Star News. The Star News points out that opponents are concerned that preventing car ownership will complicate efforts of recipients to find jobs and get to work. Carol Gundlach, a policy analyst with Alabama Arise, told the Advertiser that it’s a myth that people are dependent on the programs long term, adding there is a lot of turn-over. “People just aren’t dependent,” she told the Advertiser. “That’s a myth. People go on and off these programs all the time, particularly TANF.”


House Speaker Mike Hubbard’s trial date pushed back


A Lee County Circuit Judge Thursday signaled he would push the scheduled start of House Speaker Mike Hubbard’s ethics trial back two weeks, but the actual beginning of the trial remains an open question. Bill Baxley, one of Hubbard’s attorneys, said the defense planned to take an appeals court decision on one of their motions to the Alabama Supreme Court. The attorney, who joined the case after Hubbard’s original team left, also said the speaker’s attorneys needed more time to prepare. “I don’t know that I’ve been in a case where there’s been a more massive (number of) documents that have been filed,” said defense attorney Bill Baxley, who joined the case in January after Hubbard’s original team left. Judge Jacob Walker said he planned to move the start date of the trial from March 28 to April 11. A pretrial hearing will be set for March 28. Hubbard faces 23 counts of using public office for private gain. He maintains his innocence. The state Supreme Court appeal concerns a writ of mandamus, which the Alabama Court of Criminal Appeals rejected without comment last week. The specific contents of the writ are under seal, but Baxley wrote in a motion last month that the writ addressed “constitutional and statutory issues of jurisdictional significance.” Prosecutors are also seeking a protective order on recordings between lead prosecutor Matt Hart and attorney and talk show host Baron Coleman, a source for the prosecution. Coleman wrote in a Feb. 2 affidavit that Hart had given him information he “concluded” came from the grand jury, information he used as part of a “whisper campaign” against Hubbard in the 2014 GOP primary. Hubbard’s defense team says that could rise to the level of prosecutorial misconduct. In court Thursday, prosecutors argued the tapings fell under a broad privilege that prevented their use in court. Hart said that allowing any part of the recordings into evidence would force the recordings in their entirety to go in, to provide the proper context for the conversations. Hart argued in court Thursday that playing the tapes would discourage potential sources from cooperating with current and future investigations.

““If we don’t get (the order), we can’t do our job,” Hart said. “And that’s why it’s privileged.” Baxley called the prosecution’s stance a “super megadose of hypocrisy,” due to the state attacked the defense’s arguments about and inquiries into potential grand jury leaks in previous filings. “They’re saying not only can it not be seen by the defense lawyers, they’re saying it shouldn’t be seen by anyone,” he said, adding “this kind of privilege is ridiculous.” Walker seemed skeptical of the prosecution’s privilege claims but did not rule on the motion Thursday. He ordered the recordings handed over last week so he could review them in private. The state has characterized Coleman as a confidential informant, which both defense attorneys and Coleman himself have rejected. Walker signaled he would issue an order covering the protective order, prosecutorial misconduct, and Coleman’s informant status. He ruled against a selective prosecution motion by the defense last month, saying he saw no evidence for it. Prosecutors accuse Hubbard of using his position as speaker, and earlier as Alabama Republican Party chairman, to seek jobs and investments from friends and associates. Hubbard is also accused of helping put language into a budget that would have benefitted a client, and of lobbying executive branch officials on behalf of clients. Since the start of the case, Hubbard’s team has argued the attorney general’s office targeted the speaker for political reasons and have filed motions accusing Hart of using inflammatory language about Hubbard and former Gov. Bob Riley in private. Prosecutors have called the motions delaying tactics and said the defense has not produced evidence backing the claim.


Nearly 100 illegal gambling machines seized in 2 Jeffco raids

Jefferson County and state lawmen seized nearly 100 illegal gambling machines in two raids in Brighton. The raids happened Monday at businesses in the 5100 block of Bessemer Super Highway and the 3800 block of Edwards Street, said Jefferson County sheriff’s Chief Deputy Randy Christian. Investigators with the Alabama Attorney General’s Office helped carry out the search warrants. Christian said sheriff’s detectives began investigating the businesses after receiving complaints from residents about the presence of illegal gambling at the locations. The investigation revealed the businesses were operating illegal gambling machines. Sixty machines were seized from the business on Bessemer Super Highway, and 30 seized from the Edwards Street business. Christian said the investigation is ongoing, and arrests are pending. Sheriff’s investigators last year raided another Brighton business, Fun and Games Arcade, in the 3500 block of Main Street in Brighton, just 10 months ago. Deputies 54 slot machines that May 2015 search warrant. Authorities say such establishments are not only illegal, but invite other crimes because they deal in unreported currency and are often targets for violent robberies. The customers are often retired and/or elderly and usually are duped out of their money. Jefferson County District Attorney Brandon Falls in January issued a reminder that electronic or computerized versions of bingo are illegal. Falls on Jan. 15 said law enforcement had learned that several “establishments” are preparing to open electronic bingo operations. “The rules have not changed,” Falls said. “Commercial gaming is illegal in Alabama under the constitutional prohibitions against lotteries and the state code.” Christian agreed. “This means some legal adviser probably told them it’s OK to open now,” he said. “I hope they haven’t paid him yet.”


You may now pay more out of pocket at some Alabama hospitals


Birmingham, Ala — You may soon have to pay more for a trip to your local hospital. Blue Cross Blue Shield of Alabama is implementing changes to their Tiered Network. One of the big changes, UAB Hospital is being downgraded from a Tier One to a Tier Two. This means you’ll have to pay more out of pocket if you go to UAB. Blue Cross Blue Shield has 82 in network hospitals in the state of Alabama. Now 17 of them are moving from “tier one” to “tier two”. The insurance company said members utilizing a tier two facility will have a higher out of pocket payment. So why the changes? Blue Cross Blue Shield said the Alabama hospital tiered network was developed in 2006 to ensure cost containment, quality, and patient satisfaction in their network hospitals. This year there’s new criteria that places a greater emphasis on cost. BCBS said that new criteria resulted in more than a dozen hospitals becoming tier two. All the criteria used includes cost, quality, and patient experience with cost efficiency being the biggest factor in the decision making. Blue Cross Blue Shield said about 450,000 members will be affected by these changes. The company said the changes only affect members receiving hospital services, it does not apply to physician services. UAB told ABC33/40 they are currently in discussions with Blue Cross Blue Shield over tier designations. while those discussions are ongoing they do not want to comment.

The changes are set to take place April 1st. Several hospitals in Alabama are changing tiers. For a full list click here. The Alabama Department of Insurance told ABC33/40, “The Department does not have regulatory authority in the relationship between an insurer and a provider.”




Alabama Legislature punts Medicaid to special session


Not even halfway through the regular legislative session, Alabama lawmakers have decided they like it so much they’ll have seconds, please. Not that that’s any surprise. Special sessions happen so often in Alabama that there’s hardly anything special about them anymore. They’re as common as the Crimson Tide going to a bowl game, never mind a national championship. The news that another one is all but inevitable would be a yawner, but for the $400,000 it’s likely to cost Alabama taxpayers … if there’s only one. That’s enough money to cover all those raises Gov. Robert Bentley recently gave his staff — something lawmakers are howling about this week. Sure, Bentley’s spending spree looks bad … Heck, what am I saying? That is bad. Legislators waste that kind of money almost every year, often more than once a year, for the simple reason they cannot do their jobs in the time allotted by law. And it’s almost always for the same reason. They can’t fit $1.9 billion of budget requests into size $1.8 billion pants. But this time, there could be a lot more at stake. Medicaid has been a black hole in the Alabama General Fund budget for decades.  If this story seems somewhat familiar, it should. Go back nearly 40 years and you’ll see the same headlines over and over again. Each year, Medicaid costs grow, just like all other health care costs. Each year, lawmakers complain that they don’t know where they’ll find the money to pay those costs. To his credit, Gov. Robert Bentley has tried to control those costs going forward. Earlier this year, the state convinced the federal government to let Alabama move some of its Medicaid recipients to what are called Regional Care Organizations. Those RCOs would provide health care services to Medicaid patients for prices negotiated with the Alabama Medicaid Agency. Ultimately, the program should keep costs down, but the transition itself is expected to cost money. The federal government agreed to pay almost $750 million toward the transition, but that was less than what the state asked for, leaving Alabama to make up the difference. Long story short (I know. Too late, right?) Medicaid needs about $100 million more than what the Alabama Legislature wants to give it this year. More:

‘The Daily Show’ Correspondent Roy Wood Jr. Doesn’t Understand Chivalry in New York

People talk about moving to Canada if Trump wins…I’m from Alabama. If you’re from Alabama you have already gotten a taste of what America would be like under Trump. Trump would have to, like, officially legalize the N-word for me to consider moving. And even then, I’d still probably just move to Seattle. Seattle feels like a place that just wouldn’t take part. Seattle would be like “Excuse me, sir, can you just use your racial slurs outside?” More:

‘We’re cutting off our straight nose to spite our gay face’

Alabama’s state motto may as well be written in Comic Sans, all caps: “WE’RE NOT GAY, OK?!” We protest-eth a little too much-eth in this state. Looking at you, Sen. Greg Albritton and all your Alabama State Legislature playmates. This anti-gay-marriage bill by Albritton is actually more of an anti-state-sanctioned-sanctity-of-marriage bill. In their haste to distance themselves from everything gay, with this useless, goofy bill our state lawmakers have literally put a contract out on marriage itself.  Y’all get a rock solid Alabama values pre-nuptial whether you want one or not. Love needs a good lawyer from the get-go and not just at the bitter end, I reckon. In coming up with this cartoon I had several fun metaphors to consider. My colleague John Archibald says marriage is now between two people and a lawyer: An “Alabama Three-Way.” If it passes the House Ways to Be Mean Committee, it’s a done deal. But today’s winning “straight nose” reference, used in the cartoon above, is my buddy John Hammontree’s quote from this story when Albritton’s bill first raised its weird, ugly head last summer. I snorted with envy when I read it the first time: see at link below. Now, thanks to a mean-spirited, reactionary bill, Sen. Greg Albritton wants to get rid of state-issued marriage licenses altogether. The bill, which was approved by the Senate Finance and Taxation General Fund Committee on Monday, would instead require spouses to file a signed marriage contract with a probate office. Now I’m happy to pass the savings on to you. The homophobia in Alabama is so thick you can cut it with a fake wife. (That one’s mine. Maybe I’ll tweet it.)

Morning Money

TPP PUSH BACK — Sources inside and outside the administration pushed back on Thursday’s M.M. item reporting that some in the business world fear the Supreme Court fight will sap White House staff time and political capital away from getting the Trans-Pacific Partnership through Congress. White House officials say there is no reason they can’t push ahead for Congressional action on both SCOTUS and TPP. Another administration official said the full USTR staff would be working hard on TPP and the SCOTUS fight would not change anything. Hmm …

Outside observers are still not especially sanguine on chances to get TPP done before the election. Cap Alpha’s Loren Smith emails: “Less than 1% chance TPP is done before lame duck. Look at how Rubio, Cruz, and Kasich have tilted towards the Trump position on trade in recent weeks, ditto Hillary to Bernie. Even if Trump were to somehow not be the nominee, he’s going to be driving the debate on trade at least until the convention.

“That’s for atmospherics. Now look at the state map Mitch McConnell is dealing with: vulnerable members in Rust Belt states: Rob Portman (OH) is the headliner, but the GOP also has Toomey (PA), Kirk (IL), and Johnson (WI) – not to mention Ayotte (NH) with some trade skepticism in her state as well. Grassley (IA) is also conceivably in play. There’s zero chance McConnell brings TPP up before Election Day. Depending on what happens on November 8, maybe it could get done in lame duck, maybe not.”

DELEGATE INSANITY? — CNBC’s Lori Ann LaRocco: “The Republican nomination process may be flipped on its head if a proposed amendment is passed just days before the convention, an amendment that is showing some support among party members. … Curly Haugland, a member of the GOP’s standing rules committee, sent a letter to all GOP presidential campaigns and Republican National Committee members in November that he plans to present an amendment that essentially will allow any candidate who received a delegate to be placed back on the first ballot.

“That means even candidates who have dropped out of the race could be considered for the nomination. … Haugland’s amendment would replace Rule 40, which was passed during the 2012 convention that made it mandatory for any candidate who sought the GOP nomination to have the support of the majority of the convention delegates in eight states or more.”

WHAT TRUMP COULD DO TO EASE INVESTOR ANXIETY — Douglas A. Kass of Seabreeze Partners Management on Trump: “As for Wall Street, investors will likely feel less uncertainty if The Donald follows up his broad ideas on trade, immigration, etc., with a blueprint that demonstrates a real, affordable way to achieve his policies. It’d also help if he surrounds himself with strong advisers. Both of those things would make stocks less volatile than they are today, and markets could prosper in the months ahead”

WARREN HITS BACK — POLITICO’s Zachary Warmbrodt: “Elizabeth Warren says she sees herself more as Princess Leia than as Darth Vader. The liberal Massachusetts senator made the distinction clear in a fundraising email this afternoon blasting Rep. Blaine Luetkemeyer — the Missouri Republican who on Wednesday not only compared her to the evil Sith Lord in the Star Wars series but also encouraged a room full of bankers visiting Washington to ‘find a way to neuter’ her. … In a fundraising email titled, ‘I won’t be neutered,’ Warren said, ‘The Force is not strong’ with Luetkemeyer, who went after her at an American Bankers Association conference Wednesday.

“Warren said she identifies more with Leia, ‘a senator and Resistance general who, unlike the guys, is never even remotely tempted by the dark side.’ ‘Why would he go out of his way to say something so sexist and offensive?’ Warren said. ‘Is he hostile to all women? Clueless? Afraid? And then I had a second thought: This is all about money.’”

JPM/CITI TO FACE BREAK-UP VOTES — WSJ’s Emily Glazer and Christina Rexrode: “Shareholders of J.P. Morgan Chase & Co. and Citigroup Inc. will get to vote later this year on one of the most popular questions on the campaign trail: Should the banks break up into smaller pieces? The question will be included in the proxy filings for the two big U.S. banks and voted on at shareholder meetings later this year … Analysts have said it is highly unlikely that shareholders will support a proposal to break up the banks. A similar proposal at Bank of America Corp. last year gained about 4% of the votes.

“The shareholder votes were requested by Bartlett Naylor, a shareholder activist and a financial policy advocate at the liberal lobbying group Public Citizen. He and others have raised the issue multiple times in previous years as well, without getting much traction. Mr. Naylor, a small shareholder in both Citigroup and J.P. Morgan, said he believes the firms should split into smaller pieces because that could boost shareholder value if they are easier to manage.”

STOCKS GO GREEN — Reuters: “Asian shares edged higher on Friday, turning positive for the year, while the U.S. dollar weakened broadly after the Fed’s cautious stance on further rate increases prompted investors to rebuild their bets on riskier assets. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent in early trade, entering positive territory for the year for the first time during Asian hours.

“That echoed a recovery on Wall Street, where the S&P 500 gained 0.66 percent to close at its highest since Dec. 31, led by the materials and energy sectors .. The U.S. dollar extended its broad slide triggered by Wednesday’s Federal Reserve statement showing the U.S. central bank would raise rates at a slower pace than its previous forecast. … Oil prices soared, with U.S. crude surging 5 percent on Thursday to pierce the $40 barrier, as the market was propped up by optimism that major producers may strike an output freeze deal next month”

HEDGE FUND CLOSURES SOAR — FT’s Mary Childs: “More hedge funds closed their doors in 2015 than at any time since the financial crisis, according to new research, as turbulent markets dragged down the industry’s performance. Last year was the worst year for liquidations since 2009, with 979 funds closing, up from 864 in 2014, according to data from Hedge Fund Research. The fourth quarter of 2015 also saw the fewest new hedge funds starting up since 2009, with just 183 openings compared with 269 in the third quarter.

“The figures capture a period in which many of the industry’s marquee names suffered significant losses. The HFRI Fund Weighted Composite index fell 0.9 per cent last year, HFR data show. December saw a flurry of funds converting into family offices, including Michael Platt’s BlueCrest and Doug Hisch’s Seneca Capital, or shutting entirely as Lucidus Capital Partners did following redemptions. Unnerved by jerky markets, hedge fund clients became fearful of risk and less patient with poor returns in the second half of the year”

CURRENCIES DEFY CENTRAL BANKS — WSJ’s Min Zeng and Ira Iosebashvili: “Efforts by many of the world’s central banks to weaken their currencies are failing, raising concerns about whether policy makers are losing the ability to wield control over financial markets. This was the case again in Japan on Thursday, when the dollar fell 1.1% against yen, to ¥111.39. Despite the Bank of Japan’s efforts to push down its currency and jump-start the economy with negative interest rates, the yen is up 8% this year and is at its strongest level against the dollar since October 2014.

“European central bankers are having similar problems containing the strength of the euro and other currencies. These difficulties are a reminder that the long stretch of exceptionally low rates in response to the 2008 financial crisis has created market distortions that may be difficult for central bankers to contain. This disconnect could produce more volatility in financial markets. Even if investors can predict what actions central banks are likely to take, they are having a hard time predicting how markets will react”

OBAMA TO BERNIE: GET OUT — NYT’s Maggie Haberman and Michael D. Shear: “In unusually candid remarks, President Obama privately told a group of Democratic donors last Friday that Senator Bernie Sanders of Vermont was nearing the point at which his campaign against Hillary Clinton would end, and that the party must soon come together to back her. Mr. Obama acknowledged that Mrs. Clinton was perceived to have weaknesses as a candidate, and that some Democrats did not view her as authentic.

“Mr. Obama chose his words carefully, and did not explicitly call on Mr. Sanders to quit the race … Still, those in attendance said in interviews that they took his comments as a signal to Mr. Sanders that perpetuating his campaign, which is now an uphill climb, could only help the Republicans recapture the White House. Mr. Obama’s message came at a critical juncture for Mr. Sanders, who had just upset Mrs. Clinton in the Michigan primary and has been trying to convince Democrats that his campaign is not over, despite Mrs. Clinton’s formidable lead in delegates”

BRAZIL IN CRISIS — FT’s Samantha Pearson in São Paulo: “Brazil was teetering on the brink of a constitutional crisis on Thursday after a judge blocked President Dilma Rousseff’s appointment of her predecessor, Luiz Inácio Lula da Silva, to her cabinet, prompting clashes in Congress and on the streets. Just as Mr Lula da Silva’s swearing-in ceremony drew to a close, a federal judge issued an injunction, suspending the ex-president’s appointment on the grounds that it prevented ‘the free exercise of justice’ in corruption investigations. …

“Opposition politicians hailed the decision as a triumph for Brazilian democracy, while the government vowed to appeal, lambasting the order as part of a ‘coup’ by the country’s elite, reminiscent of Brazil’s period of military rule. Brazilian assets rallied as investors bet on the government’s collapse … Mass protests swept the country on Wednesday and Thursday night after a court released incendiary recordings of Mr Lula da Silva’s private conversations that fueled accusations he had been appointed as minister only to shield him from immediate arrest”

CLEVELAND PREPS FOR RIOTS — Bloomberg: “Cleveland will be ready should Donald Trump’s prediction come true of riots at the Republican National Convention if he’s denied the presidential nomination, security officials say. Though the Ohio city won’t say whether Trump’s remarks have it reconsidering security for the July 18-21 gathering, preparations for possible unrest are well under way. …

“‘It’s going to be a secure event,’ said Kevin Dye, a spokesman for the U.S. Secret Service, the lead agency coordinating with federal, state and local law enforcement. … Ohio Republican Party Chairman Matt Borges, a Kasich supporter, said a plan is in place for demonstrations or unrest like those that have marred other conventions. He said Trump can’t bully his way to the nomination.”


AFR BACKS HEDGE FUND BILL — Via Americans for Financial Reform: “Again and again, activist hedge funds have used sneak attacks to accumulate large stakes in public companies and then cashed out quickly at the expense of workers, communities, and the long-term viability of the company itself.

“The Brokaw Act is a sensible and badly needed response to this problem. With the introduction of their bill, Senators Baldwin and Merkley have struck an important blow against the immediate-profits-at-all-costs mentality that has become such a huge obstacle to long-term investment in our country.”

ICBA/CUNA LETTER — ICBA and CUNA sent a letter to FASB on the CECL issue: “The new letter calls on the Financial Accounting Standards Board (FASB) to amend proposed generally accepted accounting principles (GAAP) to avoid the potential for significant economic suffering in communities across the United States.”

A BETTER PATH ON DEBT REDUCTION? — Committee for a Responsible Federal Budget’s Maya Macguineas in a WSJ op-ed: “A better strategy would be to create a package of more viable and better-targeted savings. Republicans could build a credible package by using policies from the president’s budget.

“For instance, they could swap some of their existing proposals for savings from competitive bidding for Medicare Advantage plans, increasing income-related premiums, and reducing Medicare costs for bad-debt reimbursement and post-acute care”

POTUS Events

No public schedule.

Floor Action

Both chambers are out. The House returns next week; Senate, not ‘til April.


Time Running Out to Claim $950 Million in Refunds for 2012 Tax Returns

If you did not file a tax return for 2012, you may be one of nearly one million taxpayers who may be due a refund from that year. If you are, you must claim your share of almost $950 million by April 18. To claim your refund, you must file a 2012 federal income tax return. Here are the facts you need to know about unclaimed refunds:

  • The unclaimed refunds apply to people who did not file a federal income tax return for 2012. The IRS estimates that half the potential refunds are more than $718.
  • Some people, such as students and part-time workers, may not have filed because they had too little income to require filing a tax return. They may have a refund waiting if they had taxes withheld from their wages or made quarterly estimated payments. A refund could also apply if they qualify for certain tax credits, such as the Earned Income Tax Credit.
  • If you didn’t file a 2012 return, the law generally provides a three-year window to claim a refund from that year. For 2012 returns, the window closes on April 18, 2016 (or April 19 for taxpayers in Maine and Massachusetts).
  • The law requires that you properly address, mail and postmark your tax return by that date to claim your refund.
  • If you don’t file a claim for a refund within three years, the money becomes the property of the U.S. Treasury. There is no penalty for filing a late return if you are due a refund.
  • The IRS may hold your 2012 refund if you have not filed tax returns for 2013 and 2014. The U.S. Treasury will apply the refund to any federal or state tax you owe. It also may use your refund to offset unpaid child support or past due federal debts, such as student loans.
  • If you’re missing Forms W-2, 1098, 1099 or 5498 for prior years, you should ask for copies from your employer, bank or other payer. If you can’t get copies, get a free transcript by mail that provides the information you need by going to You can also file Form 4506-T to get a transcript. Order your transcript early. Transcripts arrive in five to 10 calendar days at the address we have on file for you.

Current and prior year tax forms and instructions are available on or by calling 800-TAX-FORM (800-829-3676).

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on